Dark Cloud Cover signals a potential bearish reversal after an uptrend, helping commodity traders spot weakening buying pressure and time exits or short entries.
In this guide to understanding the Dark Cloud Cover Candlestick Pattern, we’ll show you what this chart looks like, explain its components, teach you how to interpret it, and provide examples.
What Is Dark Cloud Cover?
Dark Cloud Cover is a bearish candlestick reversal pattern, similar to the Bearish Engulfing Pattern.
What Are the Components of Dark Cloud Cover?
There are two components of a Dark Cloud Cover formation:
- A Bullish Candle (Day 1) and
- A Bearish Candle (Day 2).
A Dark Cloud Cover Pattern occurs when a bearish candle on Day 2 closes below the middle of Day 1’s candle, as you can see on Chart 1 above.
In addition, the price gaps up on Day 2 only to fill the gap and close significantly into the gains made by Day 1’s bullish candlestick.
The rejection of the gap up is a bearish sign in and of itself, but the retracement into the gains of the previous day’s gains adds even more bearish sentiment.
Bulls are unable to hold prices higher, while demand is unable to keep up with the building supply.
Dark Cloud Cover Example
Chart 2 below of Boeing (BA) stock illustrates an example of the Dark Cloud Cover Pattern:
Dark Cloud Cover Potential Sell Signal
Traders typically suggest not selling exactly when one sees the Dark Cloud Cover Pattern (Day 1 & Day 2) until other confirming signals are given such as a break of an upward trendline or other technical indicators.
One reason for waiting for confirmation is that the Dark Cloud Cover Pattern is a bearish pattern, but not as bearish as it could be: part of the gains from Day 1 have still been preserved.
Other Similar Patterns
The Bearish Engulfing Pattern can be viewed as a more bearish formation, it completely rejects the gains of Day 1 and usually closes below the lows of Day 1.
Also of interest, the bullish equivalent of the Dark Cloud Cover Pattern is the Piercing Pattern.
Regulated Brokers: Where Can I Trade Commodities?
Further Reading on Reversal Patterns
These reversal tools complement Dark Cloud Cover: Bearish Engulfing Pattern, Evening Star, and Inverted Hammer.
Technical analysis is most widely used in CFD and forex trading. If you’re ready to apply these techniques, browse our vetted CFD brokers or forex brokers.
Update history
This page was revised 6 times between August 2020 and April 2026.
Added promotional section with links to vetted CFD and forex brokers in Further Reading on Reversal Patterns.
Removed broker comparison table and outdated links, refocused Further Reading section on reversal pattern strategies.
Added Doji Candlestick Patterns to the list of related trading concepts.
Added link to Doji Candlestick Patterns in Further Reading section.
Restructured guide with new intro and table of contents, reorganized broker section under dedicated heading, improved grammar and clarity in pattern explanations, and removed redundant cross-reference links.
Restructured content organization by adding a new "Two Components" introductory section and reorganizing pattern explanation, chart example, and sell signal guidance into distinct subsections with improved hierarchy.
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